NAIC BLANKS (E) WORKING GROUP

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1 NAIC BLANKS (E) WORKING GROUP Blanks Agenda Item Submission Form DATE: 03/14/2016 CONTACT PERSON: TELEPHONE: ADDRESS: ON BEHALF OF: NAME: Dale Bruggeman TITLE: Chair SAPWG AFFILIATION: Ohio Department of Insurance ADDRESS: 50W. Town St., 3 rd Fl., Ste. 300 Columbus, OH FOR NAIC USE ONLY Agenda Item # BWG MOD Year 2016 Changes to Existing Reporting [ X ] New Reporting Requirement [ ] REVIEWED FOR ACCOUNTING PRACTICES AND PROCEDURES IMPACT No Impact [ X ] Modifies Required Disclosure [ ] DISPOSITION [ ] Rejected For Public Comment [ ] Referred To Another NAIC Group [ ] Received For Public Comment [ X ] Adopted Date 06/16/2016 [ ] Rejected Date [ ] Deferred Date [ ] Other (Specify) BLANK(S) TO WHICH PROPOSAL APPLIES [ X ] ANNUAL STATEMENT [ X ] QUARTERLY STATEMENT [ X ] INSTRUCTIONS [ X ] CROSSCHECKS [ X ] BLANK [ X ] Life and Accident & Health [ X ] Property/Casualty [ X ] Health [ ] Separate Accounts [ X ] Fraternal [ X ] Title [ ] Other Specify Anticipated Effective Date: Annual 2016 See details on next page. IDENTIFICATION OF ITEM(S) TO CHANGE REASON, JUSTIFICATION FOR AND/OR BENEFIT OF CHANGE** The purpose of this proposal is to make the appropriate changes to the instructions and blank for annual and quarterly statement to reflect modifications to SSAP No. 26 Bonds, SSAP No. 30 Common Stock and SSAP No. 32 Preferred Stock by the Statutory Accounting Principles Working Group. Comment on Effective Reporting Date: Other Comments: NAIC STAFF COMMENTS This proposal is to be considered simultaneously with of modifications to SSAP No. 26 Bonds, SSAP No. 30 Common Stock and SSAP No. 32 Preferred Stock by the Statutory Accounting Principles Working Group. ** This section must be completed on all forms. Revised 6/13/ National Association of Insurance Commissioners 137

2 IDENTIFICATION OF ITEM(S) TO CHANGE 1. Add definition of SVO Identified Funds to the Investment Schedules General Instructions. 2. Add category line numbers for SVO Identified Funds to the following schedules. Schedule D, Part 1 Schedule D, Part 3 Schedule D, Part 4 Schedule D, Part 5 Schedule DA, Part 1 Schedule E, Part 2 Schedule DL, Part 1 Schedule DL, Part 2 3. Remove the * code for Class One Bond Mutual Funds and # for Exchange Traded funds from the instructions for the Code Column for Schedule D, Part 1, Schedule DL, Part 1 and Schedule DL, Part 2 as they are no longer needed with the new line categories. 4. Eliminate the Class One Money Market Mutual Funds Line from Schedule E, Part Change references to Class One Bond Mutual Funds to Bond Mutual Funds 6. Add new section (SVO Identified Funds) and a new column (No Maturity Date) to Schedule D, Part 1A with the appropriate changes to the instructions for the new section and column. 7. For the following schedules make the appropriate line and column reference changes. Supplemental Investment Interrogatories Default Component Basic Contribution, Reserve Objective and Maximum Reserve Calculations of the Assets Valuation Reserve Schedule D, Part 1B of the Quarterly Statement 8. Add SVO Identified Funds to the grouping (Lines 8 through 11) for the Schedule D, Summary by Country blank page National Association of Insurance Commissioners 138

3 ANNUAL & QUARTERLY STATEMENT INSTRUCTIONS LIFE, HEALTH, PROPERTY, FRATERNAL & TITLE INVESTMENT SCHEDULES GENERAL INSTRUCTIONS (Applies to all investment schedules) General Classifications Bonds Only: Refer to SSAP No. 26 Bonds, SSAP No. 43R Loan-Backed and Structured Securities and SSAP No. 97 Investments in Subsidiary, Controlled and Affiliated Entities for additional guidance. Industrial and Miscellaneous (Unaffiliated): This category includes all non-governmental issues that do not qualify for some other category in Schedule D, Part 1, including privatized (non-government ownership) utility companies, Class One Bond Mutual Fund as listed in Part Six, Section 2(h) of the Purposes and Procedures Manual of the NAIC Investment Analysis Office and Exchange Traded Funds listed in Part Six, Section 2(i) of the Purposes and Procedures Manual of the NAIC Investment Analysis Office. Include Public Utilities. SVO Identified Funds-Designated Securities: This category includes all Bond Mutual Fund as listed in Part Six, Section 2(h) of the Purposes and Procedures Manual of the NAIC Investment Analysis Office and Exchange Traded Funds listed in Part Six, Section 2(i) of the Purposes and Procedures Manual of the NAIC Investment Analysis Office National Association of Insurance Commissioners 139

4 ANNUAL STATEMENT INSTRUCTIONS LIFE, HEALTH, PROPERTY, FRATERNAL & TITLE SCHEDULE D PART 1 LONG-TERM BONDS OWNED DECEMBER 31 OF CURRENT YEAR Category Line Number Bonds: Parent, Subsidiaries and Affiliates Issuer Obligations Residential Mortgage-Backed Securities Commercial Mortgage-Backed Securities Other Loan-Backed and Structured Securities Subtotals Parent, Subsidiaries and Affiliates SVO Identified Funds-Designated Securities Exchange Traded Funds Approved for Reporting as Identified by the SVO a Schedule D Bond Bond Mutual Funds as Identified by the SVO Approved for Reporting as a Schedule D Bond Subtotals SVO Identified Funds-Designated Securities Total Bonds Subtotals Issuer Obligations Subtotals Residential Mortgage-Backed Securities Subtotals Commercial Mortgage-Backed Securities Subtotals Other Loan-Backed and Structured Securities Subtotal SVO Identified Funds-Designated Securities Subtotals Total Bonds Column 2 Description Give a complete and accurate description of all bonds owned. As appropriate, the reporting entity is encouraged to use the same entry as for Column 32, Issue. For Class One Bond Mutual Funds as Identified by SVO and Exchange-Traded Funds as Identified by SVO, enter the complete name of the fund. As appropriate, the reporting entity is encouraged to use the same entry as for Column 31, Issuer. For Certificate of Deposit Account Registry Service (CDARs) or other similar services that have a maturity of greater than one year, individually list the various banking institutions that are financially responsible for honoring certificates of deposit. As appropriate, the name of the name of the banking institutions should follow from the registry of the Federal Financial Institutions Examination Council (FFIEC) ( For CDOs (Collateralized Debt Obligations) or CLOs (Collateralized Loan Obligations), indicate what the CDO/CLO collateral is, such as high-yield bonds, corporate loans, etc. If the collateral is of mixed type, indicate Mix, in addition to the largest type of collateral in the mix. If the collateral is derived synthetically, indicate synthetic National Association of Insurance Commissioners 140

5 Column 3 Code Enter * in this column for all Class One Bond Mutual Funds. Enter # in this column for all Exchange Traded Funds. in this column for all Principal STRIP Bonds or other zero coupon bonds. Enter $ in this column for Certificates of Deposit under the FDIC limit. Enter & in this column for TBA (To Be Announced) securities. Enter ^ in this column for all assets that are bifurcated between the insulated separate account filing and the non-insulated separate account filing. If bonds are not under the exclusive control of the company as shown in the General Interrogatories, they are to be identified by placing one of the codes identified in the Investment Schedules General Instructions in this column. If the security is a Class One Bond Mutual Fund, an Exchange Traded Fund, a Principal STRIP bond or other zero coupon bond, Certificates of Deposit under the FDIC limit or a TBA (To Be Announced) security and is not under the exclusive control of the company, the *, $ or & should appear first, immediately followed by the appropriate code (identified in the Investment Schedules General Instructions). Separate Account Filing Only: Column 6 NAIC Designation If the asset is a bifurcated asset between the insulated separate account filing and the non-insulated separate account filing, the ^ should appear first and may be used simultaneously with the *, $ or & with the ^ preceding the other characters ( *, $ or & ) depending on the asset being reported, immediately followed by the appropriate code (identified in the Investment Schedules General Instructions). Insert the NAIC designation for such security provided in the Valuation of Securities. Any NAIC Designation that is not obtained from the current edition of the Valuation of Securities or its Supplement and that is entered by the reporting entity under its own judgment shall have the letter Z appended to the designation. For the meaning and applicability of suffixes and designations, please refer to the most recent version of the Purposes and Procedures Manual of the NAIC Investment Analysis Office Part One, Section 3. For Class One Bond Mutual Funds as Identified by SVO, enter 1. For Exchange Traded Funds as Identified by SVO, please refer to the most recent version of the Purposes and Procedures Manual of the NAIC Investment Analysis Office. Column 7 Actual Cost This column should contain the actual consideration paid to purchase the security. The Actual Cost column amount should be adjusted for: pay downs and partial sales (both reported in Schedule D, Part 4) and subsequent acquisitions of the same issue (reported in Schedule D, Part 3). Actual cost will need to be adjusted due to other-than-temporary impairments recognized, for use when determining realized gain/(loss) at disposition National Association of Insurance Commissioners 141

6 by SVO, enter the original cost of the shares purchased. Column 8 Rate Used to Obtain Fair Value Column 9 Fair Value Report rate used for determining fair value. by SVO, enter the per share fair value as of the reporting date. For U.S. Treasury Inflation-Indexed Securities enter the VOS rate (provided in the Valuation of Securities) multiplied by the inflation ratio. The fair value should be the price which, when multiplied by the notional amount (Column 10, Par Value) results in the dollar amount that would be received (excluding accrued interest) if the security was sold at fair value. The fair value included in this column (calculated from the Rate Used to Obtain Fair Value column) should be the amount used in any comparison of fair value to another valuation method (e.g., book value or amortized cost) that is prescribed by the accounting/valuation rules. For loan-backed securities, the prospective or retrospective methods are used in determining amortized value. Exclude: Accrued interest. Column 10 Par Value by SVO, enter the amount representing the number of shares owned at year-end times the rate specified in Column 8. For U.S. Treasury Inflation-Indexed Securities, Fair Value should utilize the VOS rate multiplied by the inflation ratio. Enter the par value of the bonds owned adjusted for repayment of principal. For mortgage-backed/loan-backed and structured securities, enter the par amount of principal to which the reporting entity has a claim. For interest only bonds without a principal amount on which the reporting entity has a claim, use a zero value. Enter the statement date par value for bonds with adjustable principal. An interest only bond with a small par amount of principal would use that amount. by SVO, enter Zero (0). Column 11 Book/Adjusted Carrying Value This should be the amortized value or the lower of amortized value or fair value, depending upon the designation of the bond (and adjusted for any other-than-temporary impairment), as of the end of the current reporting year. Include: The original cost of acquiring the bond, including brokerage and other related fees. Amortization of premium or accrual of discount, but not including any accrued interest paid thereon. Amortization of deferred origination and commitment fees. Deduct: A direct write-down for a decline in the fair value of a bond that is other-than-temporary National Association of Insurance Commissioners 142

7 Exclude: All other costs, including internal costs or costs paid to an affiliated reporting entity related to origination, purchase or commitment to purchase bonds, are charged to expense when incurred. Cost should also be reduced by payments attributed to the recovery of cost. Refer to SSAP No. 26 Bonds. Accrued interest. For Class One Bond Mutual Funds and Exchange Traded Funds, enter aggregate original cost of shares purchased. For reporting entities maintaining an AVR: NAIC Designation 1 5* Enter amortized cost NAIC Designation 6 Enter the lower of fair value or amortized cost For reporting entities not maintaining an AVR: NAIC Designations 1 2* Enter amortized cost NAIC Designations 3 6 Enter the lower of fair value or amortized cost *NOTE: An exception exists for Treasury Inflation Adjusted Securities under INT 01-25, where the book/adjusted carrying value may include an unrealized gain. See INT 01-25, Accounting for U.S. Treasury Inflation-Indexed Securities, for accounting guidance. The amount reported in this column should equal: Book/Adjusted Carrying Value reported in the Prior Year statement (or Actual Cost for newly acquired securities) plus Unrealized Valuation Increase/(Decrease)Total in Book/Adjusted Carrying Value plus Current Year s (Amortization)/Accretion minus Current Year s Other-Than-Temporary Impairment Recognized plus Total Foreign Exchange Change in Book/Adjusted Carrying Value plus Changes due to amounts reported in Schedule D, Parts 3, 4 and 5 Column 16 Interest Rate Show rate of interest as stated on the face of the bond. Where the original stated rate has been renegotiated, show the latest modified rate. For long-term bonds with a variable rate of interest, use the last rate of interest. For short-term bonds with various issues of the same issuer, use the last rate of interest. All information reported in this field must be a numeric value. For Class One Bond Mutual Funds as Identified by SVO, Exchange Traded Funds as Identified by SVO and Principal STRIP Bonds or other zero coupon bonds, enter numeric zero (0). Column 17 Effective Rate of Interest For issuer obligations, include the effective rate at which the purchase was made. For mortgage-backed/loan-backed and structured securities, report the effective yield used to value the security at the reporting date. The Effective Yield calculation should be modified for other-thantemporary impairments recognized. by SVO, enter Zero (0) National Association of Insurance Commissioners 143

8 Column 18 Interest When Paid For securities that pay interest annually, provide the first 3 letters of the month in which the interest is paid (e.g., JUN for June). For securities that pay interest semi-annually or quarterly, provide the first letter of each month in which interest is received (e.g., JD for June and December, and MJSD for March, June, September and December). For securities that pay interest on a monthly basis, include MON for monthly. Finally, for securities that pay interest at maturity, include MAT for maturity. For Class One Bond Mutual Funds as Identified by SVO, Exchange Traded Funds as Identified by SVO and Principal STRIP Bonds or other zero coupon bonds, enter N/A. Column 20 Amount Received During Year by SVO, enter the amount of distributions received in cash or reinvested in additional shares. Include: The proportionate share of interest directly related to the securities reported in this schedule. Column 21 Acquired Date Report amounts net of foreign withholding tax. For public placements use trade date, not settlement date. For private placements, use funding date. Each issue of bonds or stocks acquired at public offerings on more than one date may be totaled on one line and the date of last acquisition inserted. by SVO, enter date of last purchase. Column 22 Stated Contractual Maturity Date by SVO, leave blank. For perpetual bonds, enter 01/01/9999. For mandatory convertible bonds use the conversion date. ANNUAL STATEMENT INSTRUCTIONS LIFE, HEALTH, PROPERTY, FRATERNAL & TITLE SCHEDULE D PART 2 SECTION 2 COMMON STOCKS OWNED DECEMBER 31 OF CURRENT YEAR 2016 National Association of Insurance Commissioners 144

9 Column 11 Dividends - Amount Received During the Year For Mutual Funds (excluding Class One Bond Mutual Funds as Identified by SVO and Exchange Traded Funds as Identified by SVO), enter the amount of distributions received in cash or reinvested in additional shares. Include: The proportionate share of investment income directly related to the securities reported in this schedule. Report amounts net of foreign withholding tax. ANNUAL & QUARTERLY STATEMENT INSTRUCTIONS LIFE, HEALTH, PROPERTY, FRATERNAL & TITLE SCHEDULE D PART 3 LONG-TERM BONDS AND STOCKS ACQUIRED DURING CURRENT YEAR This schedule should include a detailed listing of all securities that were purchased/acquired during the current reporting year that are still owned as of the end of the current reporting year (amounts purchased and sold during the current reporting year are reported in detail on Schedule D, Part 5 and only in subtotal in Schedule D, Part 3). This should include all transactions that adjust the cost basis of the securities. Thus, it should not be used for allocations of TBAs to specific pools subsequent to initial recording in Schedule D, Part 3 or other situations such as CUSIP number changes. The following list of items provides examples of the items that should be included: Purchases of securities not previously owned; Subsequent purchases of investment issues already owned; Acquisition of a new stock through a stock dividend (e.g., spin off); and Any increases in the investments in SCA companies that adjust the cost basis (e.g., subsequent capital infusions [investments] in SCA companies valued using the equity method). This schedule should NOT be used for stock splits to show increases in the number of shares; nor should it be used for stock dividends to show increases in the number of shares (unless the stock shares received as dividends are in a stock that is not already owned by the reporting entity e.g., received in a spin off). Rather, for stock splits and stock dividends of an already owned stock, adjustments for the appropriate columns should be made in Schedule D, Part 2, Section 1 and in Schedule D, Part 2, Section 2. Bonds, preferred stocks and common stocks are to be grouped separately, showing a subtotal for each category. Class One Bond Mutual Funds as Identified by SVO and Exchange Traded Funds as Identified by SVO, which are described in the Investment Schedules General Instructions, are to be included in SVO Identified Funds -Designated SecuritiesIndustrial and Miscellaneous (Unaffiliated). Bonds are to be grouped as listed below and each category arranged alphabetically (securities included in U.S. States, Territories and Possessions; U.S. Political Subdivisions of States, Territories and Possessions; and U.S. Special Revenue and Special Assessment Obligations and all Non-Guaranteed Obligations of Agencies and Authorities of Governments and Their Political Subdivisions should be listed with a state abbreviation in the column provided for electronic data capture). If a reporting entity has any detail lines reported for any of the following required categories or subcategories, it shall report the subtotal amount of the corresponding category or subcategory, with the specified subtotal line number appearing in the same manner and location as the pre-printed total or grand total line and number: 2016 National Association of Insurance Commissioners 145

10 NOTE: See the Investment Schedules General Instructions for the following: Category definitions for bonds and stocks. Foreign column code list and matrix for determining code. Category Line Number Bonds: U.S. Governments All Other Governments U.S. States, Territories and Possessions (Direct and Guaranteed) U.S. Political Subdivisions of States, Territories and Possessions (Direct and Guaranteed) U.S. Special Revenue and Special Assessment Obligations and all Non-Guaranteed Obligations of Agencies and Authorities of Governments and Their Political Subdivisions Industrial and Miscellaneous (Unaffiliated) Hybrid Securities Parent, Subsidiaries and Affiliates SVO Identified Funds-Designated Securities Subtotals Bonds Part Summary item from Part 5 for Bonds Subtotals Bonds Column 2 Description Give a complete and accurate description of all bonds and preferred and common stocks as listed in the Valuations of Securities. by SVO, enter complete name of the fund. For Certificate of Deposit Account Registry Service (CDARs) or other similar services that have a maturity of greater than one year, individually list the various banking institutions that are financially responsible for honoring certificates of deposit. Column 4 Date Acquired For public placements use trade date, not settlement date. For private placements, use funding date. Each issue of bonds or stocks acquired at public offerings on more than one date may be totaled on one line and the date of last acquisition inserted. by SVO, enter date of last purchase National Association of Insurance Commissioners 146

11 Column 7 Actual Cost This is the recorded cost of the investment purchased during the current year and still held as of the end of the current year. This amount would also be reported in the Actual Cost column of Schedule D, Part 1 for bonds, Schedule D, Part 2, Section 1 for preferred stock, and Schedule D, Part 2, Section 2 for common stock. The amount reported in the Actual Cost Column included in Schedule D, Part 3 will never differ from the actual consideration paid to purchase the security. Any appropriate adjustments to the Actual Cost will be made in the detail listing schedules (Schedule D, Part 1; Schedule D, Part 2, Section 1; and Schedule D, Part 2, Section 2) or in Schedule D, Part 4, as appropriate. Include: Cost of acquiring the bond or stock, including broker s commission and other related fees, to the extent they do not exceed the fair value at the date of acquisition. Transaction fees on repooling of securities, and reductions for origination fees intended to compensate the reporting entity for interest rate risks (i.e. points). Exclude: Accrued interest and dividends. Column 8 Par Value All other costs, including internal costs or costs paid to an affiliated reporting entity related to origination, purchase or commitment to purchase bonds shall be charged to expense when incurred. For Class One Bond Mutual Funds and Exchange Traded Funds, enter aggregate purchase price, normally the price per share times the number of shares purchased. For mortgage-backed/loan-backed and structured securities, enter the par amount of principal purchased on a security on which the reporting entity has a claim. For interest only bonds without a principal amount on which the reporting entity has a claim, use a zero value. Enter the statement date par value for bonds with adjustable principal. An interest only bond with a small par amount of principal would use that amount. For preferred stock, enter par value per share of stock if any. by SVO, enter 0. Column 9 Paid for Accrued Interest and Dividends by SVO, enter amount of dividends on shares acquired between the dividend declaration date and the ex-dividend date National Association of Insurance Commissioners 147

12 ANNUAL & QUARTERLY STATEMENT INSTRUCTIONS LIFE, HEALTH, PROPERTY, FRATERNAL & TITLE SCHEDULE D PART 4 LONG-TERM BONDS AND STOCKS SOLD, REDEEMED OR OTHERWISE DISPOSED OF DURING CURRENT YEAR This schedule should include a detailed listing of all securities that were sold/disposed of during the current reporting year that were owned as of the beginning of the current reporting year (amounts purchased and sold during the current reporting year are reported in detail on Schedule D, Part 5 and only in subtotal in Schedule D, Part 4). This should include all transactions that adjust the cost basis of the securities (except other-than-temporary impairments that are not part of a disposal transaction). Thus, it should not be used for allocations of TBAs to specific pools subsequent to initial recording in Schedule D, Part 3 or other situations such as CUSIP number changes. The following list of items provides examples of the items that should be included: Pay downs of securities still owned (including CMO prepayments); Subsequent partial sales of investment issues still owned; Reallocation of the cost basis of an already owned stock to the cost basis of a new stock received as a dividend (e.g., spin off); and Any decreases in the investments in SCA companies that adjust the cost basis, not including other-than-temporary impairments alone (e.g., subsequent return of capital from investments in SCA companies valued using the equity method). Bonds, preferred stocks and common stocks are to be grouped separately, showing a subtotal for each category. Class One Bond Mutual Funds as Identified by SVO and Exchange Traded Funds as Identified by SVO, which are described in the Investment Schedules General Instructions, are to be included in SVO Identified Funds -Designated SecuritiesIndustrial and Miscellaneous (Unaffiliated). Bonds are to be grouped as listed below and each category arranged alphabetically (securities included in U.S. States, Territories and Possessions; U.S. Political Subdivisions of States, Territories and Possessions; and U.S. Special Revenue and Special Assessment Obligations and all Non-Guaranteed Obligations of Agencies and Authorities of Governments and Their Political Subdivisions should be listed with a state abbreviation in the column provided for electronic data capture). If a reporting entity has any detail lines reported for any of the following required categories or subcategories, it shall report the subtotal amount of the corresponding category or subcategory, with the specified subtotal line number appearing in the same manner and location as the pre-printed total or grand total line and number: NOTE: See the Investment Schedules General Instructions for the following: Category definitions for bonds and stocks. Foreign column code list and matrix for determining code National Association of Insurance Commissioners 148

13 Category Line Number Bonds: U.S. Governments All Other Governments U.S. States, Territories and Possessions (Direct and Guaranteed) U.S. Political Subdivisions of States, Territories and Possessions (Direct and Guaranteed) U.S. Special Revenue and Special Assessment Obligations and all Non-Guaranteed Obligations of Agencies and Authorities of Governments and Their Political Subdivisions Industrial and Miscellaneous (Unaffiliated) Hybrid Securities Parent, Subsidiaries and Affiliates SVO Identified Funds-Designated Securities Subtotals Bonds Part Summary item from Part 5 for Bonds Subtotals Bonds Column 2 Description Give a complete and accurate description of all bonds and preferred and common stock as listed in the Valuation of Securities, including location of all banks, trust and miscellaneous companies. If bonds are serial issues, give amounts maturing each year. by SVO, enter complete name of the fund. For Certificate of Deposit Account Registry Service (CDARs) or other similar services that have a maturity of greater than one year, individually list the various banking institutions that are financially responsible for honoring certificates of deposit. Column 4 Disposal Date For public placements use trade date, not settlement date. For private placements, use funding date. Each issue of bonds or stocks disposed of at public offerings on more than one date may be totaled on one line and the date of last disposal inserted. by SVO, enter date of last disposal National Association of Insurance Commissioners 149

14 Column 7 Consideration Include: Exclude: In the determination of this amount, the broker s commission and incidental expenses of effecting delivery. Accrued interest and dividends. Column 8 Par Value Column 9 Actual Cost by SVO, enter price received at sale, usually the number of shares sold times the selling price per share. For mortgage-backed/loan-backed and structured securities, enter the par amount of principal sold on a security on which the reporting entity has a claim. For interest only bonds without a principal amount on which the reporting entity has a claim, use a zero value. Enter the sale date par value for bonds with adjustable principal. An interest only bond with a small par amount of principal would use that amount. For preferred stock, enter par value per share of stock if any. by SVO, enter 0. This is the recorded cost of the investment purchased prior to the current reporting year and sold during the current reporting year. This amount will come from the prior reporting year s Actual Cost column of Schedule D, Part 1 for bonds, Schedule D, Part 2, Section 1 for preferred stock, and Schedule D, Part 2, Section 2 for common stock. However, it will need to be adjusted due to otherthan-temporary impairments recognized during the current year. Exclude: Accrued interest and dividends. For Class One Bond Mutual Funds and Exchange Traded Funds, enter aggregate original cost associated with the shares sold. Column 16 Book/Adjusted Carrying Value at Disposal Date Deduct: Exclude: A direct write-down for a decline in the fair value of a bond that is other-than-temporary. Accrued Interest. by SVO, enter same number as in Column 9. This should equal the Actual Cost Column amount (adjusted for other-than-temporary impairments recognized) for each specific common stock and for each preferred stock that is not amortizable; and the Amortized Cost (adjusted for other-than-temporary impairments recognized) at disposal date for each specific redeemable preferred stock that is amortizable National Association of Insurance Commissioners 150

15 Column 18 Realized Gain (Loss) on Disposal This should be the difference between the Consideration column amount and the Book/Adjusted Carrying Value at Disposal Date, excluding any portion that is attributable to foreign exchange differences. by SVO, enter the difference between the consideration, Column 7 and aggregate cost Column 9 at date of sale. Column 20 Bond Interest/Stock Dividends Received During Year For Mutual Funds (including Class One Bond Mutual Funds as Identified by SVO and Exchange Traded Funds as Identified by SVO), enter the amount of distributions received in cash or reinvested in additional shares. Include: The proportionate share of investment income directly related to the securities reported in this schedule. Report amounts net of foreign withholding tax. Column 21 Stated Contractual Maturity Date by SVO, leave blank. For perpetual bonds, enter 01/01/ National Association of Insurance Commissioners 151

16 ANNUAL STATEMENT INSTRUCTIONS LIFE, HEALTH, PROPERTY, FRATERNAL & TITLE SCHEDULE D PART 5 LONG-TERM BONDS AND STOCKS ACQUIRED DURING THE YEAR AND FULLY DISPOSED OF DURING CURRENT YEAR This schedule should include a detailed listing of all securities that were both purchased/acquired and sold/disposed of during the current reporting year (amounts purchased and sold during the current reporting year are also reported in subtotals in Schedule D, Parts 3 and 4). Reporting entities should track information separately for securities purchased in different lots rather than using some type of averaging for the issue in aggregate. Thus, this schedule should only be used when an entire lot of a security has been purchased and sold during the current reporting year (even when different lots of the same security still exist on the reporting entity s books). As with Schedule D, Parts 3 and 4, this schedule should not be used for a transaction unless it affects the cost basis of the securities. Thus, it should not be used for allocations of TBAs to specific pools subsequent to initial recording in Schedule D, Part 3 or other situations such as CUSIP number changes. Bonds, preferred stocks and common stocks are to be grouped separately, showing subtotals for each category. Bonds should be grouped and arranged alphabetically as described in the instructions for Schedule D, Part 1. (Securities included in U.S. States, Territories and Possessions; U.S. Political Subdivisions of States, Territories and Possessions; and U.S. Special Revenue and Special Assessment Obligations and all Non-Guaranteed Obligations of Agencies and Authorities of Governments and Their Political Subdivisions should be listed with a state abbreviation in the column provided for electronic data capture). Class One Bond Mutual Funds as Identified by SVO and Exchange Traded Funds as Identified by SVO that are described in the Investment Schedules General Instructions are to be included in SVO Identified Funds -Designated SecuritiesIndustrial and Miscellaneous (Unaffiliated). If a reporting entity has any detail lines reported for any of the following required categories or subcategories, it shall report the subtotal amount of the corresponding category or subcategory, with the specified subtotal line number appearing in the same manner and location as the pre-printed total or grand total line number: NOTE: See the Investment Schedules General Instructions for the following: Category definitions for bonds and stocks. Foreign column code list and matrix for determining code National Association of Insurance Commissioners 152

17 Category Line Number Bonds: U.S. Governments All Other Governments U.S. States, Territories and Possessions (Direct and Guaranteed) U.S. Political Subdivisions of States, Territories and Possessions (Direct and Guaranteed) U.S. Special Revenue and Special Assessment Obligations and all Non-Guaranteed Obligations of Agencies and Authorities of Governments and Their Political Subdivisions Industrial and Miscellaneous (Unaffiliated) Hybrid Securities Parent, Subsidiaries and Affiliates SVO Identified Funds-Designated Securities Subtotals Bonds Column 2 Description Give a complete and accurate description of all bonds and preferred and common stocks as listed in the Valuation of Securities including location of all banks, trust and miscellaneous companies. by SVO, enter complete name of the fund. For Certificate of Deposit Account Registry Service (CDARs) or other similar services that have a maturity of greater than one year, individually list the various banking institutions that are financially responsible for honoring certificates of deposit. Column 4 Date Acquired For public placements use trade date, not settlement date. For private placements, use funding date. Reporting entities may total on one line each issue of bonds or stocks acquired at public offerings on more than one date and insert the date of last acquisition. by SVO, enter date of last purchase. Column 6 Disposal Date For public placements use trade date, not settlement date. For private placements, use funding date. Reporting entities may total on one line each issue of bonds or stocks disposed of at public offerings on more than one date and insert the date of last disposal. by SVO, enter date of last disposal National Association of Insurance Commissioners 153

18 Column 10 Consideration Include: Exclude: In the determination of this amount, the broker s commission and incidental expenses of effecting delivery. Accrued interest and dividends. by SVO, enter price received at sale, usually the number of shares sold times the selling price per share. Column 11 Book /Adjusted Carrying Value at Disposal This should equal the Actual Cost column amount (adjusted for other-than-temporary impairments recognized) for each specific common stock and for each preferred stock that is not amortizable and Amortized Cost (adjusted for other-than-temporary impairments recognized) at disposal date for each specific bond and for each specific redeemable preferred stock that is amortizable. Deduct: Exclude: A direct write-down for a decline in the fair value of a bond that is other-than-temporary. Accrued Interest. by SVO, enter same number as in Column 9. Column 20 Interest and Dividends Received During Year For Mutual Funds (including Class One Bond Mutual Funds as Identified by SVO and Exchange Traded Funds as Identified by SVO), enter the amount of distributions received in cash or reinvested in additional shares. Include: The proportionate share of investment income directly related to the securities reported in this schedule. Report amounts net of foreign withholding tax National Association of Insurance Commissioners 154

19 ANNUAL STATEMENT INSTRUCTIONS LIFE, HEALTH, PROPERTY, FRATERNAL & TITLE SCHEDULE DA PART 1 SHORT-TERM INVESTMENTS OWNED DECEMBER 31 OF CURRENT YEAR Include all investments whose maturities (or repurchase dates under repurchase agreement) at the time of acquisition were one year or less except those defined as cash or cash equivalents in accordance with SSAP No. 2 Cash, Drafts, and Short-Term Investments. All short-term investments owned at December 3l of current year should be separated into bonds, mortgage loans, exempt money market funds as identified by the SVO, all other money market mutual funds,, class one money market mutual funds, other short-term invested assets and investments in parent, subsidiaries and affiliates. Within each category, investments should be arranged alphabetically. Category Line Number Bonds: Parent, Subsidiaries and Affiliates Bonds Issuer Obligations Residential Mortgage-Backed Securities Commercial Mortgage-Backed Securities Other Loan-Backed and Structured Securities Subtotals Parent, Subsidiaries and Affiliates Bonds SVO Identified Funds -Designated Securities Exchange Traded Funds Approved for Reporting as Identified by the SVO a Schedule D Bond Bond Mutual Funds as Identified by the SVO Approved for Reporting as a Schedule D Bond Subtotals SVO Identified Funds-Designated Securities Total Bonds Subtotals Issuer Obligations Subtotals Residential Mortgage-Backed Securities Subtotals Commercial Mortgage-Backed Securities Subtotals Other Loan-Backed and Structured Securities Subtotal SVO Identified Funds-Designated Securities Subtotals Bonds Parent, Subsidiaries and Affiliates Mortgage Loans Other Short-Term Invested Assets Subtotals Parent, Subsidiaries and Affiliates Mortgage Loans Exempt Money Market Mutual Funds as Identified by the SVO All Other Money Market Mutual Funds Class One Money Market Mutual Funds Other Short-Term Invested Assets Total Short-Term Investments National Association of Insurance Commissioners 155

20 A money market fund shall be reported in this schedule as a Class One Money Market Mutual Fund if such money market fund meets all of the conditions found in Part Six, Section 2(b)(ii) of the Purposes and Procedures Manual of the NAIC Investment Analysis Office, which are as follows: (1) The fund shall invest at least 97% of its total assets in U.S. Government Bonds (see Investment Schedules General Instructions), short-term debt instruments with a maturity of 397 days or less, class one bonds, and collateralized repurchase agreements comprised of those securities at all times; (2) The fund shall maintain a rating of A or better from the Standard and Poor s or a rating of A or better from Moody s Investor s Services; (3) The fund shall maintain a constant net asset value per share at all times; and (4) The fund shall allow a maximum of seven day redemption of proceeds. Investments in parent, subsidiaries and affiliates should be segregated into bonds, mortgage loans and other short-term investment assets. Column 1 CUSIP Identification All CUSIP numbers entered in this column must conform to those as published in the Purposes and Procedures Manual of the NAIC Investment Analysis Office, Part Six, Sections 2(f) and (g). CUSIP identification is required and valid only for Exempt Money Market Mutual Funds as Identified by SVO (Line ) and Class one All Other Money Market Mutual Funds (Line ). Column 5 Date Acquired For public placements use trade date, not settlement date. For private placements, use funding date. Reporting entities may total on one line each issue of bonds or stocks acquired at public offerings on more than one date and insert the date of last acquisition. For Exempt and Class One Money Market Mutual Funds as Identified by SVO and All Other Money Market Mutual Funds, enter date of last purchase. Column 13 Par Value Enter the par value of the bonds owned adjusted for repayment of principal. For mortgage-backed/loan-backed and structured securities, enter the par amount of principal to which the company has claim. For interest-only bonds without a principal amount on which the company has a claim, use a zero value. Enter the statement date par value for bonds with adjustable principal. An interest-only bond with a small par amount of principal would use that amount. For Exempt Money Market Mutual Funds as Identified by SVO and All Other Money Market Mutual Funds and Class One All Other Money Market Mutual Funds, enter zero (0) National Association of Insurance Commissioners 156

21 ANNUAL & QUARTERLY STATEMENT INSTRUCTIONS LIFE, HEALTH, PROPERTY, FRATERNAL & TITLE SCHEDULE E PART 2 CASH EQUIVALENTS Category Line Number Bonds: Parent, Subsidiaries and Affiliates Bonds Issuer Obligations Residential Mortgage-Backed Securities Commercial Mortgage-Backed Securities Other Loan-Backed and Structured Securities Subtotals Parent, Subsidiaries and Affiliates Bonds SVO Identified Funds -Designated Securities Exchange Traded Funds Approved for Reporting as Identified by the SVO a Schedule D Bond Bond Mutual Funds as Identified by the SVO Approved for Reporting as a Schedule D Bond Subtotals SVO Identified Funds-Designated Securities Total Bonds Subtotals Issuer Obligations Subtotals Residential Mortgage-Backed Securities Subtotals Commercial Mortgage-Backed Securities Subtotals Other Loan-Backed and Structured Securities Subtotal SVO Identified Funds-Designated Securities Subtotals Bonds Sweep Accounts Other Cash Equivalents Total Cash Equivalents Column 1 Description Give a complete and accurate description National Association of Insurance Commissioners 157

22 ANNUAL & QUARTERLY STATEMENT INSTRUCTIONS LIFE, HEALTH, PROPERTY, FRATERNAL & TITLE SCHEDULE DL PART 1 SECURITIES LENDING COLLATERAL ASSETS Reinvested Collateral Assets Owned December 31 Current Year This schedule should include a detailed listing of reinvested collateral assets that were owned as of the end of the current reporting year. For Schedule DL, reinvested collateral assets are collateral currently held as part of a securities lending program administered by the reporting entity or its agent (affiliated or unaffiliated) that can be resold or repledged. This is the currently held collateral, meaning original collateral if it is still in the original form received or the new invested asset resulting from the disposal and/or reinvestment of the original collateral. See SSAP No. 103 Transfers and Servicing of Financial Assets and Extinguishments of Liabilities for accounting guidance. Include reinvested collateral assets from securities lending programs where the program is administered by the reporting entity s unaffiliated agent (i.e., collateral is received by the reporting entity s unaffiliated agent that can be resold or repledged). These securities will be reported in aggregate on the Assets page, Line 10. For reinvested collateral assets from securities lending programs where the program is administered by the reporting entity s affiliated agent (i.e., collateral is received by the reporting entity s affiliated agent that can be resold or repledged), the securities may be reported on Schedule DL, Part 1 if reported in aggregate on the Assets page, Line 10 or reported on Schedule DL, Part 2 if reported in other investment schedules (e.g., Schedules A, B, BA, D, DA and E), but not both. Reinvested collateral assets reported on Schedule DL, Part 1 are excluded from other investment schedules (e.g., Schedules A, B, BA, D, DA and E). Bonds, preferred stocks and common stocks are to be grouped separately, showing a subtotal for each category. Securities borrowing and securities lending transactions shall be shown gross when reported in the Schedule DL. If these transactions are permitted to be reported net in accordance with SSAP No. 64, the investment schedule shall continue to provide detail of all transactions (gross), with the net amount from the valid right to offset reflected in the financial statements (pages 2 & 3 of the statutory financial statements). Disclosures for items reported net when a valid right to offset exists, including the gross amount, the amount offset, and the net amount reported in the financial statements are required per SSAP No. 64. Class One Bond Mutual Funds as Identified by SVO and Exchange Traded Funds as Identified by SVO, which are described in the Investment Schedules General Instructions, are to be included in SVO Identified Funds -Designated SecuritiesIndustrial and Miscellaneous (Unaffiliated). If an insurer has any detail lines reported for any of the following required categories or subcategories, it shall report the subtotal amount of the corresponding category or subcategory, with the specified subtotal line number appearing in the same manner and location as the pre-printed total or grand total line and number: NOTE: See the Investment Schedules General Instructions for the following: Category definitions for bonds and stocks. Code column list of codes and definitions for securities not under the exclusive control of the reporting entity. Flow chart for determining the NAIC designation for structured securities. List of stock exchange names and abbreviations National Association of Insurance Commissioners 158

23 Category Line Number Bonds (Schedule D, Part 1 type): Parent, Subsidiaries and Affiliates Issuer Obligations Residential Mortgage-Backed Securities Commercial Mortgage-Backed Securities Other Loan-Backed and Structured Securities Subtotals Parent, Subsidiaries and Affiliates SVO Identified Funds -Designated Securities Exchange Traded Funds Approved for Reporting as Identified by the SVOa Schedule D Bond Bond Mutual Funds as Identified by the SVO Approved for Reporting as a Schedule D Bond Subtotals SVO Identified Funds-Designated Securities Total Bonds Subtotals Issuer Obligations Subtotals Residential Mortgage-Backed Securities Subtotals Commercial Mortgage-Backed Securities Subtotals Other Loan-Backed and Structured Securities Subtotal SVO Identified Funds-Designated Securities Subtotals Total Bonds Column 2 Description Column 3 Code Give a complete and accurate description of all bonds and preferred and common stocks as listed in the Valuations of Securities. by SVO, enter complete name of the fund. For Certificate of Deposit Account Registry Service (CDARs) or other similar services that have a maturity of greater than one year, individually list the various banking institutions that are financially responsible for honoring certificates of deposit. Enter * in this column for all Class One Bond Mutual Funds. Enter # in this column for all Exchange Traded Funds. in this column for all Principal STRIP Bonds or other zero coupon bonds. Enter $ in this column for Certificates of Deposit under the FDIC limit. Enter & in this column for TBA (To Be Announced) securities. Enter ^ in this column for all assets that are bifurcated between the insulated separate account filing and the non-insulated separate account filing National Association of Insurance Commissioners 159

24 If assets are not under the exclusive control of the company as shown in the General Interrogatories, they are to be identified by placing one of the codes (identified in the Investment Schedules General Instructions) in this column. If the security is a Class One Bond Mutual Fund, an Exchange Traded Fund, a Principal STRIP bond or other zero coupon bond, certificates of deposit under the FDIC limit or a TBA (To Be Announced) security and is not under the exclusive control of the company, the *, $ or & should appear first, immediately followed by the appropriate code (identified in the Investment Schedules General Instructions). Separate Account Filing Only: If the asset is a bifurcated asset between the insulated separate account filing and the non-insulated separate account filing, the ^ should appear first and may be used simultaneously with the *, $ or & with the ^ preceding the other characters ( *, $ or & ) depending on the asset being reported, immediately followed by the appropriate code (identified in the Investment Schedules General Instructions). Column 4 NAIC Designation/Market Indicator Column 5 Fair Value The NAIC Designation/Market Indicator reported for this column should be determined in a manner consistent with the instructions of other schedules for the lines shown below: Lines through Schedule D, Part 1, Column 6 Lines through Schedule D, Part 2, Section 1, Column 20 Lines through Schedule D, Part 2, Section 2, Column 17 Line Schedule BA, Part 1, Column 7 For Lines , , , , and , the column should be left blank. Refer to the flow chart in the Investment Schedules General Instructions for instruction on how to determine the NAIC designation for structured securities. The value reported for this column should be determined in a manner consistent with the fair value column instructions of other schedules for the lines shown below: Lines through Schedule D, Part 1, Column 9 Lines through Schedule D, Part 2, Section 1, Column 10 Lines through Schedule D, Part 2, Section 2, Column 8 Line Schedule A, Part 1, Column 10 Line FV of the underlying collateral Schedule B, Part 1 Line Schedule BA, Part 1, Column 11 For those lines where the same type of investment is reported on other schedules but do not have a fair value column, report the amount consistent with instructions for the following: Line Report BACV, Schedule DA, Part 1, Column 8 Line Report Balance, Schedule E Part 1, Column 6 Line Report BACV, Schedule E Part 2, Column National Association of Insurance Commissioners 160